The Coming Crisis :: Blackouts, Energy Policy and the New War ::

The largest power blackout in US history hit 50 million people in the northeast of the United States and southern Canada, from New York City to Cleveland, Detroit and Toronto. Whole states and cities were shut down and paralyzed.

"It’s a wake-up call," acknowledged President Bush during a tour of a California national park. "The grid needs to be modernized, the delivery systems need to be modernized".[1]

An "antiquated system" as the President described it, however, is not the whole story. In fact, the blackout that swept across North America is only the latest manifestation of a much deeper, and murkier, web of issues relating to the Bush administration’s energy policy – a policy intimately connected to national security and foreign policy.

So far, there has been no official declaration of the fundamental causes of the blackout, with US and Canadian officials pointing fingers at each other, and promising proper inquiries. Meanwhile, industry regulators and analysts have blamed structural flaws in the US electricity distribution system, as well as the Bush administration for failing to deal with the effects of deregulation.[2]

Deregulation – a Scapegoat?

At this stage, the exact causes are unclear – but whatever they are, there is no doubt that they exemplify the same brand of fundamental problems with US energy policy that have led to previous blackouts. In March, as rolling blackouts swept through parts of California, US Energy Secretary Spencer Abraham warned that the US faces its "most serious shortage" since the 1970s.[3] Yet Harvey Rosenfield, president of the Foundation for Taxpayer and Consumer Rights, said about the California crisis, "There is no energy shortage. There is an energy cartel of companies that is manipulating the supply at any given moment in order to manipulate massive market price increase and get high profits."[4]

There is certainly a great deal of truth in Rosenfield’s depiction of the profit-hungry role of giant energy corporations and their manipulation of deregulation.[5] However, the corporate role in the California crisis has been taken by many to illustrate that any and all such electricity problems, including the latest blackout, are nothing other than a consequence of the same corporate profiteering under the mantle of deregulation. But this is only a piece in a larger, more worrying, energy puzzle.

In fact, a significant element of the blackout problem lies in US policy viz-a-viz energy supplies. Indeed, unnoticed by most of the world’s media, the US has been facing a growing energy crisis of epic proportions which is likely to lead to more of the same. As of this year, US oil stocks and natural gas supplies have been at an all-time critical low that many predicted would lead to grave problems for the US economy.

Running Out of Oil and Gas

On 15th January 2003, the US Department of Energy revealed that US crude oil stocks in were down to their second-lowest level since records began in 1976, as the oil workers’ strike in Venezuela held back supply. While minimum stocks needed to run US refineries are 270m barrels a day, the DoE confirmed that there were only 272.3m barrels remaining, meaning that the US was in danger of having to deplete its strategic reserves. The supply shortage, naturally, led to soaring oil prices.[6]

Similar problems were plaguing the US natural gas front; a major problem for electricity supplies given that the vast majority of the latter is produced from gas. In early 2003, the Financial Times noted prophetically that: "Natural gas supplies in the US have reached critically low levels. and may be inadequate to meet demand during a hot summer this year."

So dire was the situation that Energy Secretary Abraham "called an emergency meeting of the National Petroleum Council" in June in response to pressure on the Bush administration to "deal urgently with the shortage". According to Abraham the US had "696bn cu ft of gas in storage at the end of March, the lowest since 1976 when record-keeping began. By the week of April 11, levels had dropped to 623bn cu ft."

The day after Abraham’s confessions, US Federal Reserve chairman Alan Greenspan testified before the House energy and commerce committee on the threats to the economy from the shortage.[7]

In this context, the summer blackout which swept over North America in mid-August is hardly the greatest surprise – indeed, it seems that Bush’s energy team, aware of the growing domestic energy supply crisis, was also aware of its potential ramifications: the inability to meet domestic demand in summer.

Indeed, Business Week quoted gas insider Thomas E. Capps, CEO of utility Dominion Resources (D ) Inc., warning that: "It doesn’t look like we’re going to catch up" in terms of supply. The Week elaborated that, apart from "stepped-up demand caused by a cold winter and shrinking imports", economists attribute "the doubling of prices over the past year to. diminishing production from old wells, and low output from new fields".[8]

Symptoms of a Global Crisis

The domestic US energy crisis is symptomatic of a wider problem – a truly global energy crisis in the making. In his address to the second international conference of the Association for the Study of Peak Oil (ASPO) which was meeting at the French Petroleum Institute (IFP) on 27th May 2003, leading US energy expert Matthew Simmons – an adviser to the Bush administration, Vice President Cheney’s 2001 Energy Task Force and the Council on Foreign Relations – asked the question: "Is the energy glass half full or half empty?"

Answering his own question, Simmons observed:

"One thing that we do all know is that oil and gas resources are genuinely non-renewable and so someday they will basically run out. And also, we are using 28 billion barrels a year, that’s a lot of energy to be consuming. And peaking, as you all know, is different than running out. Is ‘peaking’ an important question or issue? … What peaking does mean, in energy terms, is that once you’ve peaked, further growth in supply, is over. Peaking is generally, also, a relatively quick transition to a relatively serious decline at least on a basin by basin basis. And the issue then, is the world’s biggest serious question.

"… Most serious scientists worry that the world will peak in oil supply. But most assume that this day of reckoning is still years away. Many also assume that non-conventional oil will carry us through several additional decades. They were right to ring the alarm bell. But they too might also be too optimistic. … Five years ago I barely had thought about the question of, ‘What does peaking mean and when might it occur?’ I was intending at the time though to study the concept of depletion and the phenomenon that field after field was tending to peak fast and decline at rates that were unheard of before. … Peaking of oil will never be accurately predicted until after the fact. But the event will occur, and my analysis is leaning me more by the month, the worry that peaking is at hand; not years away. … But unfortunately the world has no Plan B if I’m right."[9]

A growing consensus of petroleum geologists argue that the peak of oil production will occur between 2006 and 2015.[10] However, some other leading experts, such as Colin J. Campbell – a former geologist for Oxford University, Texaco, British Petroleum and Amoco (prior to the BP Amoco merger) and oil consultant for Statoil, Mobil, Amerada, Total, Shell, and Esso – argue that the peak of global conventional oil production has already occurred in the year 2000.[11] Former Bush administration energy adviser Simmons concurs with the idea that the oil peak is not years away, but already "at hand".

What does the oil peak mean, tangibly, for our societies? One US scientist Richard Duncan – Director of the Institute for Energy and Man – has created a model based on world energy production and population data, positing that industrial civilization cannot outlive its own resource base, the most important component of which is energy. If the resource base is exhausted, industrial civilization will be permanently unsustainable. To date, Duncan’s model has not been refuted.[12]

The Coming Crisis and Military Interventionism

Addressing the Geological Society of America in the year 2000, Duncan described the catastrophic impact of the oil peak in the coming decades: "Energy production per capita will fall to its 1930 value by 2030, thus giving Industrial Civilization a lifetime of less than or equal to 100 years.

"Should this occur, any number of factors could be cited as the ’causes’ of collapse. I believe, however, that the collapse will be strongly correlated with an ‘epidemic’ of permanent blackouts of high-voltage electric power networks – worldwide… Governments have lost respect. World organizations are ineffective. Neo-tribalism is rampant. The population is over six billion and counting. Global warming and emerging viruses are headlines. The reliability of electric power networks is falling. And the instant the power goes out, you are back in the Dark Age."[13]

World governments, including the United States, have done little to solve the energy dilemma in a meaningful way. This is not, however, because they are completely unaware of the reality of the oil peak and its implications for industrial civilization. On the contrary, at least for the United States, the energy crisis is directly linked to the current course of US national security strategy in terms of the new ‘war on terror’.

As noted by Campbell – who is also Convener and Editor of the Association for the Study of Peak Oil and Trustee of the London-based Oil Depletion Analysis Centre:

"We may look back and find that the year 2000 was the peak: a turning point when the prosperity of the past, driven by an abundant supply of cheap oil-based energy, gave way to decline in the future. A discontinuity of this magnitude is hard to grasp. The poor countries of the world will bear most of the burden. But the United States will be in serious difficulties. There is a danger of some ill-considered military intervention to try to secure oil."[14]

Unifying Energy and National Security Policy

Thus, when Dick Cheney addressed the US Energy Association Efficiency Forum on 13th June 2001 about the California blackouts, he not only talked about technological fixes to the electricity grid, but also of the need to "to increase energy supplies from diverse sources; from oil and gas, renewables, coal, hydro and nuclear."[15]

The emphasis, however, is on grabbing as much oil and gas as is conceivably possible before impact of the oil peak hits home. To this end, two months beforehand in April 2001, Vice-President Cheney commissioned a little-known but authoritative report on "energy security" conducted jointly by the James Baker Institute for Public Policy and the Council on Foreign Relations – Washington DC think-tanks with very close government connections. The report, titled ‘Strategic Energy Policy Challenges For The 21st Century’, directly addressed the imminent energy crisis posed by the peak of global oil production.

"The world is currently precariously close to utilizing all of its available global oil production capacity." The impending crisis is increasing "US and global vulnerability to disruption" and now leaves the US facing "unprecedented energy price volatility," already leading to electricity blackouts in areas like California. Having squarely blamed the peak of global oil production for the blackout problem, the report warns of "more Californias" ahead. The "central dilemma" for the Bush administration is that "the American people continue to demand plentiful and cheap energy without sacrifice or inconvenience." But if the global demand for oil continues to rise, world shortages could reduce the status of the US to that of "a poor developing country."

With the "energy sector in critical condition, a crisis could erupt at any time [which] could have potentially enormous impact on the US.. and would affect US national security and foreign policy in dramatic ways." The growing energy crisis thus demands "a reassessment of the role of energy in American foreign policy… Such a strategy will require difficult tradeoffs, in both domestic and foreign policy. But there is no alternative. And there is no time to waste." The US will only be able to prevent other powers from exploiting its dependency by seizing the strategic initiative to adopt "a leadership role in the formation of new rules of the game," otherwise "US firms, US consumers and the US government [will be] in a weaker position." One of the key "consequences" of the fact that "the United States remains a prisoner of its energy dilemma" is the "need for military intervention." The report thus recommends that energy and security policy be integrated to prevent "manipulations of markets by any state."

The principal source of disruption to the existing energy system, the report concludes, lies in "Middle East tension." The growing decline of the Anglo-American system of regional control by proxy means that the "chances are greater than at any point in the last two decades of an oil supply disruption." The Middle East seems to be facing a rise in anti-American sentiment, particularly the oil-rich states of the Persian Gulf:

"Gulf allies are finding their domestic and foreign policy interests increasingly at odds with US strategic considerations, especially as Arab-Israeli tensions flare. They have become less inclined to lower oil prices… A trend towards anti-Americanism could affect regional leaders’ ability to co-operate with the US in the energy area. The resulting tight markets have increased US vulnerability to disruption and provided adversaries undue political influence over the price of oil."

The threat posed by Iraq is highlighted as a particularly crucial focus of US foreign policy. During the year 2000, the report observes, Iraq had "effectively become a swing producer, turning its taps on and off when it has felt such action was in its strategic interest to do so." There was a "possibility that Saddam Hussein may remove Iraqi oil from the market for an extended period of time" in order to damage prices.

"Iraq remains a destabilising influence to… the flow of oil to international markets from the Middle East. Saddam Hussein has also demonstrated a willingness to threaten to use the oil weapon and to use his own export programme to manipulate oil markets.

This would display his personal power, enhance his image as a pan-Arab leader… and pressure others for a lifting of economic sanctions against his regime. The United States should conduct an immediate policy review toward Iraq including military, energy, economic and political/diplomatic assessments.

The United States should then develop an integrated strategy with key allies in Europe and Asia, and with key countries in the Middle East, to restate goals with respect to Iraqi policy and to restore a cohesive coalition of key allies."[16]

The New Imperialism

Is it any wonder in this context that Iraq was on the Bush Cabinet’s ‘hit-list’ long before they even came to power? This is evident in a September 2000 publication by the neoconservative think-tank, the Project for the New American Century (PNAC), entitled ‘Rebuilding America’s Defenses: Strategies, Forces and Resources for a New Century’. The report was drawn-up for Dick Cheney , Donald Rumsfeld (Defence Secretary), Paul Wolfowitz (Rumsfeld’s Deputy), President George W. Bush’s younger brother Jeb (Governor of Florida) and Lewis Libby (Cheney’s Chief of Staff). Other members of the Bush administration who contributed to the report include John Bolton, Undersecretary of State; Stephen Cambone, head of the Pentagon’s Office of Program, Analysis and Evaluation; Eliot Cohen and Devon Cross, members of the Defense Policy Board, the powerful Pentagon advisory group; and Dov Zakheim, Defense Department Comptroller

The PNAC report shows that Bush’s cabinet had planned to establish military control over the Persian Gulf regardless of Saddam Hussein and any threat his regime may or may not have posed to the world, or to his own people. "The United States has for decades sought to play a more permanent role in Gulf regional security," the document notes. "While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein."

In one fell-swoop, the document dispels the myth that the Bush plan to invade Iraq was fundamentally motivated by concerns regarding Saddam’s regime such as weapons of mass destruction and so on. The report also exposes in detail the wide-ranging nature of the underlying plans and strategies behind the current ‘war on terror’, plans laid a year before the 11th September 2001 terrorist attacks, and their primary motive: the expansion of Empire.

Principally, the document supports a "blueprint for maintaining global US pre-eminence" – a polite euphemism for global US hegemony – precluding the rise of a great power rival, and shaping the international security order in line with American principles and interests." It also cites approvingly an earlier 1992 Pentagon document authored by Wolfowitz and Libby advocating that the US must "discourage advanced industrial nations from challenging our leadership or even aspiring to a larger regional or global role."

In this vein, US armed forces operating abroad are described as "the cavalry on the new American frontier." A "core mission" for the "cavalry" is to "fight and decisively win multiple, simultaneous major theatre wars." To thus preserve the "global Pax Americana", the report concludes that US forces must perform "constabulary duties" – in other words, act as policeman of the world thus undermining the United Nations. Peacekeeping missions, for instance, "demand American political leadership rather than that of the United Nations." Instead of the UN, the United Kingdom is pinpointed as a convenient instrument of the American Empire, or in the words of the PNAC: "the most effective and efficient means of exercising American global leadership." Moreover, this overall imperial blueprint amounts to an "American grand strategy" that must be advanced for "as far into the future as possible."

To secure this state of affairs and to prevent any state from challenging the US, a much larger US military presence must be spread throughout the world in addition to the approximately 130 nations where US forces are already stationed. To that end, permanent military bases must be installed in the Middle East, in southeast Europe, in Latin America and in southeast Asia, where no such bases previously existed. Even further, the report endorses the creation of "US Space Forces" to dominate space, as well as absolute control of cyberspace to counter "enemies" attempting to use the internet to thwart US interests.

Indeed, Iraq is only the beginning. Among the other pertinent points raised by the PNAC report is the fact that "even should Saddam pass from the scene," the US intends to maintain bases in Saudi Arabia and Kuwait permanently, despite domestic opposition. The document further lists several other States as dangerous rogues representing a threat to US designs, namely, North Korea, Libya, Syria and Iran, raising the spectre of a whole series of wars. Iran in particular, the report observes "may well prove as large a threat to US interests as Iraq has".

The existence of such regimes requires the establishment of a "world-wide command-and-control system" under US tutelage. Worse still, the document hints at a new Cold War with China, advocating "regime change" there to be supported by increasing "the presence of American forces in southeast Asia" in order that "American and allied power" provide "the spur to the process of democratisation in China." Europe is also targeted as potentially rivalling the US.[17]

That imperialism is now the defining characteristic of US foreign policy is indisputable. Richard Haass – now Director of Policy Planning at the US State Department -.observed in a paper delivered at the Atlanta Conference in the year 2000, that the international system "is and will likely remain a world of distinct American primacy. No country or group of countries will be in a position to balance American economic, military, and cultural power for the foreseeable future." But US foreign policy is still confronted with a fundamental question: "what to do with a surplus of power and the many and considerable advantages this surplus confers on the United States." One of the key "building-blocks" of Haass’ vision for the future of world order under US primacy is the erosion of the concept of State-sovereignty. According to the traditional notion of sovereignty, "what goes on within the borders of a nation-state is its business and its business alone." This definition, however, is unsuited to the times. Over the past half century, "and especially over the past decade, the idea that sovereignty should not be absolute has gained strength." State-sovereignty, Haass argues, should be "conditional," i.e. "linked to how a government treats its own citizens." When the US decides that a "government is unable or unwilling to safeguard its citizens" or that "the inherent contract between the government and the governed is violated" then it falls upon the international community, under US leadership of course, "to act – be it diplomatically, with sanctions, with aid, or with military force – under the banner of humanitarian intervention."

But the principal objective of any such international action against a state is not the promotion of democracy or, conversely, the undermining of tyranny. Haass argues that "mature democracies" act with "relative restraint towards both their own citizens and their neighbours." He then concedes that "promoting democracy" should be a "consideration" for US foreign policy, "but not a fundamental one, given that other vital interests often must take precedence." If considered at all, US foreign policy should target "immature democracies" that are "all too prone to being captured by nationalist forces," a term he uses disapprovingly, perhaps revealing that his concept of "democracy" precludes "nationalist" sentiments such as independence, self-determination or control over one’s own resources. Citing unjust "local economic, political, social, and cultural realities" – the structures of which were deliberately established by the Western powers during and after the colonial era – as obstacles to any attempt at democratisation, Haass emphasises that the US should instead focus on "helping to build. markets."

Thus, while Haass advocates international action – including military intervention – to counter governments that do not "safeguard their citizens," at the same time he admits that democracy – defined as acting with "restraint towards. [its] own citizens" is not in reality a central concern of US foreign policy. Haass further concludes that "ambitious objectives, such as promoting multi-ethnic societies or democracy, should normally be avoided." Rather, other "vital interests" take precedent, namely what Haass calls "economic openness," which is "defined not only by the movement of goods, capital, and services across national lines but also by openness within states, i.e., transparent markets that favor private sector activities," and thus of course the profitable activities of private US corporations and investors. The logical conclusion is that if in securing such "vital interests in the Persian Gulf or Northeast Asia" democracy is undermined, then this is not a problem. Indeed, if "nationalist forces" representing indigenous interests are caught in the cross-fire of US foreign policy, that is only to the advantage of US interests.

Despite Haass’ attempts to veil this strategy in humanitarian jargon designed to lend US goals a benevolent appearance, he summarises the essence of the strategy in very revealing terms. "[B]uilding and maintaining such an order," he notes "would require sustained effort by the world’s most powerful actor, the United States." This requires Americans to "re-conceive their role from one of a traditional nation-state to an imperial power." Haass goes on to call for the establishment of an "informal" American Empire, informal because it is to be maintained when possible indirectly, and only through direct means when necessary to stabilise the informal system of indirect control. Referring to the 19th Century British Empire as a model, Haass argues that direct coercion or force should be normally used as a last resort to protect this informal system:

"To advocate an imperial foreign policy is to call for a foreign policy that attempts to organize the world along certain principles affecting relations between states and conditions within them. The US role would resemble 19th century Great Britain. Influence would reflect the appeal of American culture, the strength of the American economy, and the attractiveness of the norms being promoted as much as any conscious action of US foreign policy… Coercion and the use of force would normally be a last resort; what was written by John Gallagher and Ronald Robinson about Britain a century and a half ago, that ‘The British policy followed the principle of extending control informally if possible and formally if necessary,’ could be applied to the American role at the start of the new century. Indeed, an American empire would have to be informal if it were to succeed if only because American democracy could not underwrite an imperial order that required constant, costly applications of military power."[18]

In the new American century then, according to the State Department’s chief policy planner, military power is to be employed to "extend control formally" when "informal control" is threatened, a policy considered necessary in the Middle East in particular due to the systemic decline in regional order under US hegemony.

The Collapse of Empire and Industrial Civilization

Whatever the specific causes of the latest blackout, it is clearly a taste of things to come, unless the US government drastically revises its energy policy, which is inextricably bound up with its foreign and national security policy. The energy crisis represented by the oil peak has grave implications for the future of industrial civilization. So far, no one is willing to consider the prospect of investing huge amounts of money into research and development for transferring our societies away from oil and gas dependency, and towards reliance on other renewable energy sources.

This is not because the technology does not or cannot exist. On the contrary, viable proposals based on sound science have already been made – but vetoed. California is a case in point. The state’s blackout problem could have been solved long ago if viable proposals for creating a grid complex integrating generators based on renewable energy sources including solar, wind and geothermal power, had been implemented. One such proposal in the mid-1990s was accepted by the California Public Utilities Commission, but eventually trashed by the Federal Energy Regulatory Commission.[19]

Thus, so far there has been no real inclination to seriously consider the transfer to renewable energies. This is perhaps because the sane option is very costly in the short-term, requiring drastic transformations in the entrenched attitudes and practices of corporate giants (not to mention our entire way of life).

So the Bush administration has instead embarked upon the course that oil industry expert Campbell has already warned us of – a series of wars to establish direct access to regions blessed with large oil and gas reserves, designed to shore-up a doomed Empire whose life-blood is black gold. The reality, however, is that the Empire has only a few decades left, and nothing will reverse the current course towards civilizational decline except a thorough overhaul of our energy policies, and along with them, our foreign policies.[20]

Indeed, our entire social, cultural, political and economic systems will have to undergo total revision on the basis of new sustainable, community-orientated and ethical systems, in harmony with human nature and the natural environment. The gravity of the choice we now face needs to be understood – this is a matter of life and death, of the sheer survival and destruction of human civilization as we know it. The sane option is this: that the people of the world come together to forge a new, equitable and peaceful way of organizing our societies, one that undercuts existing institutions and power-structures based on a value-system that upholds justice and compassion. Otherwise, we only have a few decades left before the collapse begins.

[9] FTW Exclusive, ‘Revealing Statements from a Bush Insider about Peak Oil and Natural Gas Depletion’ [Transcript of address by Matthew Simmons at 2nd International Conference of Association for the Study of Peak Oil], From The Wilderness, 12 June 2003, http://www.fromthewilderness.com/free/ww3/061203_simmons.html. (emphasis added)

[10] For extensive discussion and documentation see Heinburg, Richard, The Party’s Over: Oil, War and the Fate of Industrial Societies, Clairview Books, 2003, Chapter 3.

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